DawnC
Expert Alumni

Deductions & credits

Not a typo.  The highlighted statement is referring to the amount of foreign sourced income used.   In order to carry back the credit, you have to have foreign sourced income that was not used.   See this example in Pub 514.   To carry a credit forward or back to a tax year, in that tax year, your tax paid had to be less than the LIMIT for that year, which is based on your foreign income.  

 

If, because of the limit on the credit, you cannot use the full amount of qualified foreign taxes paid or accrued in the tax year, you are allowed a 1-year carryback and then a 10-year carryover of the unused foreign taxes.     

 

If the foreign taxes paid were more than the amount used (the highlighted statement), you would have an excess to apply to another year.   You could not apply an excess from another year to a year you already have an excess in.  

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